France’s energy giant Total will take a 10 percent stake in the Arctic LNG 2 project being planned by Russia’s largest independent natural gas producer Novatek.
The binding deal, which was previously announced by the Kremlin, was signed on Thursday in St Petersburg, where French President Emmanuel Macron arrived to take part in an economic forum and held talks with Russian President Vladimir Putin.
The agreement also provides the right for Total to acquire additionally up to 5 percent in the Arctic LNG 2 project in case Novatek decides to decrease its participation interest in the project below the currently planned 60 percent, according to a Novatek statement.
The transaction would be closed no later than March 31, 2019, the statement said.
The LNG project’s value is estimated at $25.5 billion.
“Total is one of the leading global LNG players and a valued partner of Novatek with a long and successful track record of mutually beneficial cooperation. We welcome their participation in our Arctic LNG 2 project,” Novatek’s chief Leonid Mikhelson said during the signing of the deal.
“Our prolific hydrocarbon resource base in the Yamal and Gydan peninsulas offers an unparalleled opportunity to participate in scalable LNG projects that will offer competitively priced LNG to key consuming markets. The entry of such a professional partner to Arctic LNG 2 already at an early stage confirms outstanding economic attractiveness and huge perspectives of LNG projects on the Yamal and Gydan peninsulas,” he said.
“Total is delighted to be part of this new world class LNG project alongside its partner Novatek, leveraging the positive experience acquired in the successful Yamal LNG project,” Patrick Pouyanné, CEO of Total said.
He added that this project fits into Total’s strategic partnership with Novatek and also with the company’s “sustained commitment to contribute to developing the vast gas resources in Russia’s far north which will primarily be destined for the strongly growing Asian market.”
“Arctic LNG 2 will contribute to our strategy of growth in LNG by developing competitive projects based on giant low costs resources,” Pouyanné said.
Novatek’s second Arctic LNG export project raised a lot of interest and the company has already signed memorandums of understanding with Japanese and Chinese partners as well as the Saudi Arabian national oil company, Saudi Aramco.
The final investment decision on the Arctic LNG 2 project is expected in 2019.
Speaking with LNG World News last week, Novatek’s CFO Mark Gyetvay, said the company plans to launch Arctic LNG 2 in 2022 or 2023.
The facility to be assembled on gravity-based platforms will have an annual production capacity of 19.8 million tons of LNG, with the Italian engineering company Saipem in charge of the construction of the gravity-based structures.
LNG World News Staff